KARACHI: There was a reduction of Rs 1500 in spot rate of Karachi Cotton Association. The price of cotton went down by Rs 2000 pet maund and rate of Phutti decreased by Rs 1500.
Significant decline in the rate of cotton in international cotton markets was also witnessed. Mill owners are protesting against indefinite closure of gas supply to textile mills in Punjab.
It is expected that cotton production target may be achieved. Pakistan Hosiery Manufacturers Association says that increase in energy tariff has made it impossible to run the industry.
As per details, the rate of Phutti which was in between Rs 10,000-10,500 per 40 kg after decreasing by Rs 1000-1500 reached at Rs 9000 per maund. The rate of cotton which was at Rs 23,000 per maund after decreasing by Rs 2000-2500 reached at Rs 21,000 per maund. The spot rate of Karachi Cotton Association stop rate was at Rs 21,000 per maund after decreasing by Rs 1500 per maund.
It is pertinent to mention here that new cotton season in Pakistan will start in July and Spot Rate Committee of the Karachi Cotton also issues new rate on July 1.
The cotton price is expected to be lower for the season of 2023-23, due to which textile spinners and ginners will have to be very careful.
The rate of US dollar has started decreasing but the country’s economic situation has made it difficult to make quick decisions. It is becoming increasingly difficult to make any business decisions due to the increasing prices of petroleum products and electricity. It is expected that after the next budget inflation will further increase. According to the information received from many cotton producing areas of Sindh and Punjab, at present the cotton crop is better except in some areas due to which the supply of cotton is increasing day by day. Many ginning factories will resume their operations from June 15 while the supply of Phutti will significantly increase from July 15. The season will also be relatively long. Although in some areas the supply of water has returned to normal but the temperature is still high. There is a bearish trend in international cotton markets.
New York Cotton’s July future trading price reached at highest level of 155 American cents and then fell to the lowest level of 135 American cents, after which it closed at 138 American cents. According to the experts it could go down to 130 American cents. In the same way rate of Future Trading for the month of December is declining.
Cotton prices continue to decline in Brazil, Central Asia and Africa, while in India the price of cotton is much higher as spinning mills are suspending their operations or becoming partially operational because the rate of cotton is higher then the cotton yarn parity.
In Sindh and Punjab, the price of cotton for new crop is Rs 21000 to 22000 per maund while the price of Phutti per 40 kg is Rs 9000. The rate of Khal, Banola and oil is stable.
The spot rate committee of Karachi Cotton Association reduced the spot rate by Rs1500 per maund and closed it at Rs 21000 per maund.
Karachi Cotton Brokers Forum Chairman Naseem Usman told that the bearish trend prevails in international cotton markets. The rate of New York Cotton has witnessed a significant decrease
According to the USDA’s weekly export and sales report, more than three lac bales of cotton for the year 2021-22 were sold which is significantly higher than the previous week’s average.
China topped the list with more than one lac forty four thousand bales, followed by Vietnam with more than 87,000 bales. Bangladesh was on number third with more than 43,000 bales.
One lakh 9 thousand 100 bales of cotton for the year 2022-23 were sold.
China topped the list with more than 88,000 bales, followed by Mexico with 12,400 bales and Turkey with 4,400 bales.
Federal Minister for Finance Miftah Ismail has assured the delegation of Pakistan Textile Exporters Association that government would pay the outstanding refunds of Rs42 billion in the month of June in terms of DLTL.
Miftah Ismail also appreciated the suggestions made by the Pakistan Textile Exporters Association regarding on electricity and gas prices for the export industry and promised to consider them. In this regard, Patron Chief of Pakistan Textile Exporters Association Khurram Mukhtar, Chairman Sohail Pasha, and Secretary-General Azizullah Gohar met Federal Minister Miftah Ismail and Minister of State for Petroleum Musaddiq Malik in Islamabad recently on to discuss the problems facing the industry.
The delegation told the ministers that textile exports have been increased by 30% in dollar terms during the current financial year and the volume of textile exports was expected to be more than 20 billion USD by the end of the financial year.
The federal ministers assured them that Prime Minister Shehbaz Sharif would make a formal announcement on his return from his visit to Turkey. The federal finance minister and petroleum adviser would visit Faisalabad in July at the invitation of the PTEA.
The cultivation of cotton has been completed over 1.936 million hectares of land in the potential areas countrywide against the target of 2.32 million hectares for the current season (2021-22).
The crop sowing; however, decreased about 6.9% as compared to cultivation over 2.078 million hectares in the previous season, said an official of the Ministry of National Food Security and Research.
Talking to a news agency, he said that according to the provincial agricultural extension departments and crop reporting services, 83.4% cotton sowing target had been achieved in the current season.
There was 25.05% increase in crop plantations in Sindh, 12.3% in Balochistan and 54.5% in Khyber-Pakhtunkhwa.
However, the cotton sowing in Punjab registered 17.3% negative growth during the period under review, owing to drought and dry weather at the start of the season, the official said.
The cotton crop was sown over 1.279 million hectares across Punjab, which constituted 79.4% of the target of 1.61 million hectares.
However, in Sindh, the cotton crop was cultivated over 0.594 million hectares, which accounted for 92.8% of the target of 0.64 million hectares. Balochistan met 91.4% of the sowing target of 0.64 million hectares.
The official mentioned that the cotton production target for the current season had been fixed at 11.034 million bales, based on the yield of approximately 740 kg per hectare.
The Ministry of National Food Security has proposed a revision in the intervention price of seed cotton to Rs6,000 per 40 kg for the crop season 2022-23 in order to provide a fair rate of return to the farmers.
The proposal, he said, was also aimed at increasing cotton production to bring stability to the domestic market.
The ministry has also proposed the constitution of cotton price review committee.
Meanwhile, the industrialist of Faisalabad, while rejecting the government’s measures regarding the industry including increase in prices of petroleum products, electricity and gas tariffs, said that textile units were going to be shut down due to increase in prices of petroleum products and electricity.
Addressing a press conference along with officials of various sectors of the industry, the chairman of Pakistan Hosiery Manufacturers and Exporters Association said that timely action of previous government had not only kept their industry afloat in the days of Corona epidemic but also their orders were increased.
He said that this was the time when the industries of Bangladesh, India and Vietnam were shut down due to lockdown. Due to which Pakistan succeeded in regaining its place in the world markets and we were getting more orders but due to the policies of the present government it is possible for them to run the industry.
He said that the government has neglected them in the budget. The government policies are destroying the industry. He said that the electricity and gas tariffs of Punjab and Karachi are being doubled.
He said that in the same way the price of subsidy being given to the fertilizer factories is being collected from them. He asked how the industrialists should bear the burden of incompetence of the government. He said that ‘exporter mafia’ wants the industry to be shut down as a result of which millions of workers will be unemployed.
“We have no political agenda and no affiliation to any political party. If the industry shuts down, we will be on the streets along with our workers because we have no other choice,” he said.
He said that under the fast track policy of the previous government, they got their withheld rebate funds for 11 years which they reinvested in business and Pakistan’s hosiery industry got back standing on its two feet.
The current government is continuing to abolish the fast track policy which was formulated under the textile policy which helped the industry by fixing electricity prices.
He said that due to load shedding, the industry is going to run on three times more expensive fuel. Similarly, the increase in interest rates is in any case not friendly to businessmen.
He said that the government is going to shut down the industry to meet the conditions of IMF. Why doesn’t the government slash the government spending and MPs’ salaries to meet IMF requirements? Why is it that the burden is always on the people and the industrialists, he asked.
Moreover, Sui Northern has stopped supply of gas to textile mills across Punjab indefinitely. Sui Northern said that the supply was suspended for two days while APTMA said that production capacity was reduced by 35%. APTMA has called a meeting on Monday to protest against the gas cut. Abdul Rahim Nasir, Central Chairman, APTMA, said that due to curtailment of gas by Sui Northern the capacity of Captive Power Plants is reduced by 35% and it is expected that it will be difficult for the exporters to complete the orders worth 30 Crore dollars.
Adviser to the Prime Minister Musaddiq Malik told APTMA delegation that arrival of LNG cargo ship has been delayed. He also said that gas will be restored on Friday night but a according to fresh report that gas to textile sector has been suspended for indefinite period.
The mill owners have decided to protest and summoned a meeting in Lahore on Monday, June 6.
Copyright Business Recorder, 2022
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